Subwoofr founders Joe Lennon and Simon Cogan think it's time musicians stopped losing money to streaming services and digital piracy.

“It’s no secret that artists are making paltry amounts of money from recorded music these days,” says Lennon. “The financial value of music is being eroded as listeners flock to streaming services where they can listen for free or for a low monthly subscription. The net effect is that artists get paid tiny sums of money for their efforts.”

Lennon, a huge music fan, says that in 2004 the global recorded music industry was worth $21.9 billion. By 2014, this had dropped to $15 billion.

“This significant decline in revenues is hitting artists and record labels alike,” he says.

“Some of this has been recovered through increased pricing and higher sales in live performances, but artists can only be in one place at any given time and can only tour a finite number of days in a year.

“Although streaming revenues are increasing, the total market continues to decline. Streaming services are not providing a sustainable replacement for traditional physical formats and digital downloads.”

The unique thing about the Subwoofr platform is that it is “artist-centric”.

“There’s a lot of innovative music tech out there, but one of the major issues is that everyone is focusing on building the next big ecosystem,” Lennon says.

Favourite artists

“They are trying to build consumer brands, places where people go to find all the artists and all the content. So they might sell music subscriptions (Spotify, Apple), ad-supported video content (YouTube), music downloads (Bandcamp), crowdfunding (PledgeMusic) and so on.

“This means fans need to go to lots of different places to find various parts of the music experience for their favourite artists. When an artist uses Subwoofr, they are in essence creating their own ecosystem, rather than becoming part of ours.”

There are three parts to the Subwoofr product, the most important of which is that the platform will provide artists with a payment system that allows them to make money on multiple items (music, merchandise and concert tickets, for example) in one place.

The platform is also a website-builder and content management system where artists can create their own site with little or no technical experience.

The third difference is that Subwoofr provides artists with a personal space where they can create their own community and fan base.

Combined expertise

Subwoofr was set up in Cork in September this year and began beta-testing at the end of October with a number of artists. The company’s target market is anybody who creates, sells and promotes music and it will be focusing on the US, UK, Germany and Japan initially.

The Subwoofr platform will be launched commercially early in 2016 and will be promoted online through content marketing, webinars, paid advertising and placement with influential bloggers.

Lennon is a seasoned software engineer with a track record in senior roles in the technology sector. Cogan is a chartered accountant with a background in financial modelling, forecasting and business strategy.

He was financial controller at Ardmore Shipping during its initial public offering on the New York Stock Exchange.

Their combined expertise has allowed them to keep development costs very low (about €20,000 in cash), but Lennon says that will change when the product goes live and they start hiring staff. With this about to happen, they would like to raise €500,000 to fund the next phase of their business.

"When we talk to people about Subwoofr, they ask if we are competing directly with the likes of Apple Music and Spotify. The answer is no," Lennon says.

“The major streaming services are designed for the masses; our solution is designed for artists and their ‘super fans’, who account for 61 per cent of the global spend in the industry.”